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The importance of documentation in tax disputes
Discovery of documentation is an important step which must be taken in all legal disputes. Taxand South Africa highlights how this is no different in tax dispute matters and that the discovery of documents becomes especially important where the taxpayer bears the onus of proof.
Following a legislative update in July 2014, in all South African tax dispute cases all relevant documents have to be discovered by both the taxpayer and the South African Revenue Service (SARS) whether such documents are supportive of the party’s case or not. This includes internal communications but excludes legally privileged documents.
Before the rules were updated, there was provision for the parties to make discovery only after the exchange of pleadings (as is the case in conventional litigation). Under the new rules there are a now occasions when discovery is either obligatory or can be requested at an earlier stage than was the case before.
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Also published in Thomson Reuters' Taxnet Pro, 28 August 2014
Not only do taxpayers now have to make disclosures upfront of the documentation relied upon for grounds of objection, but they also have the opportunity to better understand SARS’ case before it pleads thereto. This is a welcome development for multinationals with operations in South Africa.
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